Assessee to Pursue Pending Proceedings Before Appellate Authority Instead of Filing Writ Petition | HC

Case Details: Mahindra and Mahindra Ltd. vs. Assistant Commissioner of Income-tax - [2024] 169 taxmann.com 333 (Bombay)

Judiciary and Counsel Details

• G.S. Kulkarni & Advait M. Sethna, JJ.
• Devendra Jain & Shashank Mehta, Advs. for the Petitioner.
• N.C. Mohanty, Adv. for the Respondent.

Facts of the Case

The assessee was issued a show cause notice under section 148A(b). The assessee filed an appeal and a review application before the Principal Chief Commissioner under section 264, and both the proceedings were pending. The assessee contended that the impugned order and the impugned notice would stand covered by the decision of this Court in Hexaware Technologies Limited v. Assistant Commissioner of Income Tax (2024) 464 ITR 430 as also the decision of the division Bench in Siemens Financial Services Pvt. Ltd. v. Deputy Commissioner of Income Tax [2024] 160 taxmann.com 243 (Bombay) in regard to the applicability of section 151 of the provisions of the Act as the sanction had not been granted by the appropriate authority as specified under the said provisions.

Considering the decision of this Court being of the jurisdictional High Courts, the assessee filed a writ petition before the Bombay High Court.

High Court Held

The High Court held that once the assessee availed of an alternate remedy as provided under the Income Tax Act, and if the assessment order as also the notices are contrary to the substantive provisions of section 151A and section 151, as interpreted by Court in Hexaware Technologies Limited and Siemens Financial Services Pvt. Ltd., the Appellate Authority as also the Revisionary Authority being bound by the said decisions of the jurisdictional High Court, need to consider such legal position.

Thus, the assessee was not precluded from raising all such contentions, as raised in the present proceedings, before the said authority.

Accordingly, it was opined that the proceedings which were pending before the CIT(A) as also the Revisionary proceedings, be decided considering the contentions of the petitioner, namely as to whether the impugned assessment order as also the notice under section 148 was illegal when tested on the law as declared by this Court in the decisions mentioned above.

An approach shouldn’t be followed when the appellate authority is already involved in proceedings. Writ petitions should be entertained only to adjudicate matters that can be decided by the appellate authority, considering the Court’s decisions. As rightly pointed out, entertaining writ petitions in such circumstances would require the Court to entertain all pending matters involving the applicability of its decisions, which is impractical.

Hence, it would be appropriate that the assessee pursues the pending proceedings as filed before the appropriate Appellate Authority. Accordingly, the present proceedings that assail the assessment order are not entertained when an appeal is already filed by the assessee, which is pending. Hence, the petition was disposed of.

List of Cases Reviewed

• Hexaware Technologies Limited v. Assistant Commissioner of Income Tax [2024] 464 ITR 430
• Siemens Financial Services Pvt. Ltd. v. Deputy Commissioner of Income Tax [2024] 160 taxmann.com 243 (Bombay) [Para 11] – followed.

List of Cases Referred to

• Hexaware Technologies Ltd. v. Asstt. CIT [2024] 162 taxmann.com 225/464 ITR 430 (Bombay) (para 3)
• Pr. CIT v. Maruti Suzuki India Ltd. [2019] 107 taxmann.com 375/265 Taxman 515/416 ITR 613 (SC) (para 5).